Plant-based Milk: Price
The current price of plant-based milk, like oat milk, can be 2 to 3 times the cost of skim or whole cow's milk. However, the average price per hundredweight (cwt) of almond milk declined by 2%, soy milk declined by 5%, while coconut milk increased by 13% from 2015 price.
CURRENT PRICE OF PLANT-BASED MILK
- Sales of plant-based milk currently accounts for 15% of the total milk market in the United States in 2018 and 13% in 2019.
- In 2018, plant-based milks saw a 9% increase in sales compared to cow's milk, according to Plant Based Foods Association.
- Comparatively, the price of 1 gallon of nut milk or oat milk can be 2 to 3 times the cost of skim or whole cow's milk.
- This is because plant-based milks are not subsidized and tend to be available at specialty stores.
- Preference to new options is gaining popularity as 63% purchased more pecan milk in 2017 compared to 2016, and 58% purchased quinoa milk in 2017 than in 2016.
- Below is the current average price per gallon of plant-based milk in the US:
HISTORICAL PRICE COMPARISON
- Based on a study released by Mintel, plant-based milk sales grew to 61% from 2012 to 2017 at $2.11 billion market while dairy milk sales had a 15% decline for the last 5 years.
- However, when it comes to unit price as compared to 2015, the calculated per unit value of plant-based milk in 2017 had the following changes in price:
OTHER HELPFUL FINDINGS
- The most popular among the plant-based/non-dairy milk are almond (with 64% market share), soy (13% market share), and coconut (12% market share).
- Almond milk is perceived to be the healthiest type of milk by 17% Americans.
- But researchers say that among plant-based milk, soy milk is considered the "most balanced" when it comes to nutrition.
- According to a market research projection report from PR Newswire, the main target group for plant-based milk products are middle/high income groups because of its premium price will remain higher compared to traditional milk.
- Drivers of the projected price increase are due to the increasing demand in plant-based milk and beverages that include switching due to health reasons, milk allergy, ethical concerns on animal abuse, consumers looking for alternatives to dairy, vegan diet or lifestyle, and increased use among people with dairy milk/lactose intolerance.
After a thorough search, the information regarding the future price projection of plant-based milk in the US and/or its percentage for the next 1-2 years was found to be unavailable in the public domain.
To find this information, we initially used market research and industry reports such as MarketWatch and PR Newswire among others. Aside from market overview, these sites were checked since they usually provide the drivers of growth (or decline) of a certain industry group and price is sometimes mentioned as factor of the revenue change. However, the reports available are mostly focused on dairy milk segment. One report from PR Newswire, however, was focused on plant-based beverages market, but the only relevant information is the premium pricing of plant-based milks that remains a challenge in manufacturers and no specific price projection was mentioned. Additionally, relevant reports from websites like Mintel, Plant Based Foods, and Dairy Herd only have the current and historical price changes of plant-based milk and no projections.
Secondly, we tried to look for the top players in the plant-based milk market. The idea was to get any projected price change that these companies foresee which could affect their future sales. One example was Oatly, a plant-based milk which was launched in the US in 2016, which saw a rapid growth among Americans who prefer dairy alternatives. However, research on price changes among these players like Oatly mostly uncovers only their current market status, growth, placement, and production rate; nothing cited specific to prices. The absence of the future price projection could be due to its confidentiality for competitive reasons.
We also tried to triangulate the information by checking the price projections of government websites either on milk products or plant-based foods in general and try to get any available information referring to the overall price changes on these categories. Through this strategy, we found a recent price projections up to 2028 from the US Department of Agriculture (USDA) which is detailed per year. But the available prices are focused on farm-level dairy milk that is foreseen to increase from 2019 to 2028 and no percentage was mentioned for plant-based milk or plant-based foods in general which we can use as a proxy or triangulate based on the percentage change in all milk category. The website Milk Business also has mentions of price change based on the USDA World Agriculture Supply and Demand (WASDE), but it was focused on Class III (milk used for cream cheese and hard cheeses) and Class IV (milk used for dry products and butter) and not on plant-based, dairy alternatives.
Lastly, we looked for information that tackles how the price of milk was computed based on its components. This way we can possibly have an estimate of the future price changes if we can also find the composition of plant-based milk and the possible future changes (increase/decrease) in its components. We found a comprehensive article about the regulations followed by USDA from the Federal Milk Marketing Orders (FMMO) that the price of milk is based on its components of skim milk (measured in hundredweight or cwt) and butterfat (measured per pound). However, the only available information is for the computation of the traditional milk, based on its "class" and no information is related to plant-based milk.